Three bus companies, including one that carries riders to the Hamptons and another that takes Long Island commuters to Manhattan, have suspended service ahead of a Wednesday bankruptcy hearing.
Employees of Hampton Luxury Liner, 7Bus and Classic Coach were told on Labor Day not to go to work Tuesday, the bus services’ owner confirmed Tuesday.
The short notice to employees came ahead of a bankruptcy court hearing scheduled for Wednesday in Central Islip. The court will consider a proposed sale of some or all of the 27 vehicles from the bus companies, which operate out of 1600 Locust Ave. in Bohemia. The companies employ 53 full-time and part-time workers, owner William E. Schoolman said.
Hampton Luxury Liner filed for Chapter 11 bankruptcy last September. Classic Coach and 1600 Locust Avenue Associates LLC, which owns the building where the companies operate, filed in March. The bankruptcy court combined the cases in May.
The company is working with creditors on a restructuring plan “to bring the company out of bankruptcy and/or to purchase the company’s assets out of the bankruptcy,” said Schoolman, who is also chief executive of Hampton Luxury Liner, Classic Coach, 7Bus and 1600 Locust Avenue Associates.
Schoolman’s wife, Barbara Schoolman, president of RDL Acquisitions Inc., filed a reorganization plan last week. The proposed plan would be funded by a loan of at least $750,000, increased operating cash flow generated by a reduction in fleet size, and a restructured debt service.
Court-appointed Chapter 11 Trustee Allan B. Mendelsohn determined that closing down the businesses and selling the vehicles were the best decisions because the costs of operating the businesses will soon exceed the income generated, according to a court filing last month.
“Ultimately, it would go out of business” if the assets were sold, said Salvatore LaMonica, an attorney for the trustee. “We are trying to find a buyer [for the company]. We have not found one yet.”
The trustee notified Schoolman via email on Friday that he intended to cease business operations by Monday at 5 p.m. An attorney for Schoolman filed a request on Sunday for the court to issue an order preventing the trustee from shuttering the business.
Although the trustee has recommended liquidating the company’s assets rather than selling the company as a whole, Schoolman has joined a motion made by SY Bus Advertising LLC in an effort to prevent the sale of the buses. SY Bus, a joint venture partner of Hampton Luxury Liner, filed a motion last month objecting to liquidation on the grounds that the business is still profitable and that liquidation would harm the value of other assets.
Schoolman has also taken issue with specifics of the trustee’s auction plan, saying it would “provide preferential treatment to only one of the companies’ creditors and will work to the detriment of all other creditors and the company’s 53 valuable employees.”
Geoffrey Lynch, president of Southampton-based Hampton Jitney, a competitor of Hampton Luxury Liner, said this year’s summer season has been a “challenging” one.
“Gas is cheap,” he said. “More people are driving so ridership was down slightly and congestion was up.
“We’re always looking for good drivers if any of his drivers would like to apply for us,” Lynch said of Schoolman’s employees. With Victor Ocasio